LABS by ARM 2.0 Accelerator Programme Commences

The ARM Group is pleased to announce the commencement of the second cohort of the LABS by ARM Accelerator programme on the 10th of February, 2020. Similar to the maiden edition ARM is partnering with Ventures Platform to support and fund compelling fintech startups solving key problems in innovative ways around the financial industry, unlocking verticals and markets thereby changing how users access and consume financial services.

During the 12-week Accelerator programme, we will work intensively with each FinTech startup in a series of activities aimed at exponentially advancing the growth of their companies within the short time frame. We will also invest $20,000 (twenty thousand Dollars), offer office space, Amazon Web Services (AWS) credit of up to $10,000 (ten thousand Dollars), access to the ARM network capabilities and support the companies with carefully selected mentors comprising seasoned business leaders from the fintech industry who will provide hands-on support to the companies.

After the application deadline for LABS by ARM 2.0 , we had one hundred and ninety-one (191) submissions that were eventually reduced to thirty-three (33) and further reduced to eleven (11) companies after a tedious third round of evaluations. These eleven (11) companies were invited to the ARM headquarters in Ikoyi, Lagos for a chat with seasoned professionals, and technology entrepreneurs.. Finally, five (5) of the companies were selected and have now been invited into the Accelerator programme. They are:

TRUESAVER:

Truesaver provides access to zero-interest loans by leveraging rotational savings. The solution is a contact-based platform where contacts can save a set amount monthly over a period with lump-sum savings being given to each saver monthly in rotation.

OWOAFARA:

Owoafara is building tools and platforms to curate, verify and match small and medium-size businesses with financial institutions for loans as well as provide support for companies that do not qualify for financing to enable the businesses grow their business and better prepare to access financing.

RISE:

Rise helps Nigerians grow wealth by connecting customers with the best investment opportunities around the world, cheaply and seamlessly.

KWABA:

Kwaba is a property rental financing platform that is solving bulk rental payment problems for low to middle income earning Nigerians Kwaba makes the upfront rent payment for retail customers and these customers are able to pay their rent on a monthly basis.

QUANTIS FINANCE:

Quantis is leveraging technology to automate trading and investments in order to make financial markets and instruments more accessible to local investors.

Henrietta Bankole-Olusina (MD, ARM Financial Advisers)
Barbara Ezeife (Head, Marketing and Corporate Communications, ARM)

ARM

Established in 1994, ARM is a leading Nigerian diversified and integrated asset management group firm that offers wealth creation solutions and opportunities through a unique blend of traditional asset management and alternative investment services to retail, high net worth and institutional investors.

ARM currently manages total assets of approximately N 1.25 trillion (as at December 2019). www.arm.com.ng

Ventures Platform

Ventures Platform is creating inclusive and sustainable wealth in Africa, by building the capacity of African entrepreneurs and innovators leveraging technology to create sustainable solutions to the most urgent problems on the continent. They are one of the most active early-stage investors on the continent.

Ventures Platform also works with big corporations in driving innovation internally and in building lasting relationships with the startup ecosystem to help fuel business growth and achieve innovation goals.
www.venturesplatform.com

Stock Recommendation for the Week, February 10

Last week, the Nigerian bourse witnessed a steep decline as the ASI closed -2.69% WoW, while market capitalization lost N239 billion to close at N14.62 trillion. All sectors closed in red, save the insurance sector (+0.15%). The decline was anchored by the Breweries (-5.62%), Cement (-4.94%), Banking (-2.26%), Oil & Gas (-5.74%), and Telecom (-1.48%) sectors. On stock performance, FBNH (-8.40%), ZENITH (-5.04%), NB (-6.36%), INTBREW (-5.56%), DANGCEM (-5.50%), BUACEMENT (-4.32%) and MTNN (-2.17%) yielded negative returns amongst other stocks.

• Dangcem– STRONG BUY (FVE: N240.87): DANGCEM’s FY 19 earnings is expected to be pressured (EPS: N14, vs N22 in 2018) owing to lower volumes in Nigeria business (due to increased competition from BUA Cement) and some of its Pan Africa business, as well as high base of tax credits from 2018. However, DANGCEM currently trades at FY 19E P/E of 11x on our estimates, which is cheap compared to WAPCO and CCNN of 17.7x and 16.8x, respectively. We believe current valuation is unjustified given the superior ROE of 24%.

• Zenith Bank Plc – STRONG BUY (FVE: N31.50): We have made adjustment to our FY 2019 expectation for Zenith Bank following some surprises in the Q2 numbers. In specifics, we revised net interest income lower due to compressed yields on its loans and treasury asset (H1 18:10.6%, H1 19 9.1%) amidst contraction in funding cost. Elsewhere, we adjusted NIR higher due to upward review of electronic fee income and trading book. Thus, we now forecast PBT of N218 billion (-5.5% YoY), while we cut our FVE to N31.57/share (previously: N33.71/share).

• Guaranty Trust Bank Plc – STRONG BUY (FVE: N49.66): GTB’s 9M 19 earnings expanded modestly with PAT and EPS expanding only 3.4% YoY to N146.9 billion and N4.99/share respectively. Although, we expect a slower growth in EPS (+4% YoY to N6.53) over 2019, our case for GUARANTY remains the resilience in NIR, improved cost management, still strong loan book with a moderate expansion in credit loss provision to 0.5%.

• Nigerian Breweries Plc – STRONG BUY (FVE: N75.82): With intense competition from International Breweries (IB) and graduated excise duty (+17% YoY) that kicked-off in Jan-19, revenue growth is expected to be slow even as we expect higher finance cost (+38% YoY) to be another pressure point to earnings this year. However, given our case for a slight improvement in volumes and decline in cost of sales (-1.1% YoY) which translates to gross (+120bps YoY) and EBIT (+101bps YoY) margin expansion, the misery seems moderated. Overall, the net impact of all our adjustments translates to PBT of N29.9 billion and EPS of N2.58 (+6.3% YoY) over 2019.

• Seplat Plc – STRONG BUY (FVE: N828.90): Seplat’s total production declined in Q3 19, as the drop in gas production offset improvement in the oil segment. That said, we remain positive on growth in production going into the final quarter of the year (especially in oil) and into 2020 as Seplat increases capex. Cashflows remain healthy. Upsides reside in the ANOH Gas project and acquisition of Eland Oil & Gas Limited.

Kindly, visit ARM Research Portal for full stock reports.